More money for social security won’t pay off due to flawed schemes: Mirza Aziz

The proposed budget has increased social security allocation, but marginalised people will not benefit from it as safety net schemes have implementation flaws, according to AB Mirza Azizul Islam, an adviser to a caretaker government. 

"Although social security allocation has increased, past experience suggests people won't get its benefit as rice meant for the Vulnerable Group Development (VGD) programme often ends up in local political leaders' warehouses." he said while speaking at a shadow parliamentary debate on the proposed budget on Saturday (8 June), organised by the Debate for Democracy. 

He said marginalised communities are frequently deprived of the benefits of social safety net programmes due to political influence and local power dynamics. 

"The government doesn't even acknowledge these problems," he said. "These issues need to be recognised first. Without recognition, how can we find solutions?"

The seasoned economist thinks that the new budget lacks specific guidelines on how to bring down the inflation rate within 6.5%. 

"The budget for FY25 has been described as contractionary, which typically involves reducing demand. However, in a country heavily dependent on imports, it is not possible to lower inflation without reducing import costs and duties," he said. 

In response to a question about the forex reserve situation, the economist stated that there is cause for concern regarding the current reserves. 

However, he thinks that the situation has not reached the severity seen in Sri Lanka. 

Achieving economic stability will be challenging without special budgetary initiatives for investment and job creation, according to him. 

Mirza Aziz also went through pressing issues like foreign debt servicing, NPLs in the banking sector, and domestic borrowing to implement the budget. 

Given the current level of foreign debt, he said the government will definitely face challenges in repaying foreign loans. 

Excessive dependency on borrowing from banks to finance the budget deficit will harm entrepreneurship development and employment, he also pointed out. 

Mirza Aziz slammed the Bangladesh Bank for providing "incorrect" data about defaulted loans, saying that the tendency to hide information is a barrier to good governance.  

He also sees a lack of good governance and efficiency in tax administration. 

"The National Board of Revenue is not able to meet its tax collection targets. Half of the TIN holders in the country do not file income tax returns. The NBR should investigate this issue," he said. 

Presiding over the debate, Hasan Ahmed Chowdhury Kiran, chairman of the Debate for Democracy, said trade bodies like the FBCCI and DCCI have termed the next fiscal's budget logical, realistic and people-oriented in concert with the ruling Awami League, while some think tanks have criticised it.  

"Since the FBCCI and the Dhaka Chamber have welcomed the proposed budget as enthusiastically as the government, these two trade associations may seem more like mouthpieces for the government rather than representatives of the business community," he alleged. 

Debaters from Bangladesh University of Business and Technology defeated Cumilla University debaters in the debate titled "Proposed Budget Will Help Maintain Economic Stability."